Explained: Car Tax Goes Digital, Ditches Discs

Tax is part of everyday life and for motorists, this is no exception. Road tax has been part of the motoring experience since the 19th century, whether you are driving a 2 seater sports car or a 7 seater minivan.

No one is exempt from paying vehicle excise duty, and the payment has been demonstrated to other road users and official bodies by displaying a road tax disc. Thought to be a deterrent to irresponsible road users who wish to avoid tax payment, the well known tax disc has been in place for almost a century; however Chancellor George Osborne has recently announced that the paper disc is to be superseded by an electronic system.

According to latest news, official bodies state that the physical display to record that tax is paid and up to date is now redundant since the DVLA and Police both rely upon advanced electronic systems that allow them to recall data on millions of vehicles across the country in a matter of minutes. The new tax system brings the motor industry into the 21st century to embrace the digital era, yet the tax payment process will remain the same with road users still paying online or in a post office for their car tax.

Currently, motorists have the option to choose whether they pay for 6 months or 12 months of road tax, with the 6 month option incurring an additional 10% charge; however this is expected to be reduced to 5% with the new system.

The added benefit of the new system is that road users have the ability to pay by monthly direct debit, which will also incur a 5% charge as per the 6 month option, and this would be welcomed by those who prefer to pay their bills in smaller instalments.

The new changes are due to be implemented from October 2014, however there are concerns that more and more motorists may get away with not taxing their vehicles as a staggering 200,000 drivers who were reported for not having paid their car tax were spotted by members of the public. Of course, this would not happen with the removal of the tax disc display.  Yet despite this, the DVLA has stated that tax evasion is actually at some of the lowest recorded figures in history.

Other concerns raised include how prospective buyers of second hand cars can confirm the tax left on their vehicle and  also how people will be able to recognise if a car has been abandoned or is due to be scrapped or declared SORN. Obviously, the DVLA is heavily reliant upon the honesty and responsibility of car owners and vendors, and certainly with regards to car scrapping it is vital that motorist use a reputable salvage yard to safely and correctly dispose of their vehicle. Any outstanding tax on a SORN vehicle or one that is booked in to be carefully disposed of can be claimed back online, just as it is today, so in theory it should have very little impact on a road user’s day to day life – other than reducing the administration around car tax.

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